Northamptonshire County Council has agreed a framework for enabling the authority to balance its books — including a review of all contracts with third parties.

The council has established a team which will now develop and cost the options for service reductions outlined in a document presented to councillors this week.

Northamptonshire has taken the measure a week after it issued its second 114 notice in the space of six months, warning the council needs to find up to £70m of savings this year.

Council leader Matt Golby said: “In many ways we are now at the starting point of the very long journey of realigning our budget.

“Last week’s section 114 notice is the first time where there is complete clarity shared by us, the government and the external expertise at CIPFA of the scale of the challenge we face. This was critical if we were to ever have a chance of rising to this challenge.”

Golby said that 70% of the council’s spending is through contracts with third party suppliers and “a large piece of this work will be to review all of these contracts against the new priorities on a contract-by-contract basis.”

Meanwhile, the council’s section 151 officer identified a “can’t be done” attitude towards making savings within the authority’s adult social care team in a letter warning of financial crisis in October 2015, it has emerged.

A Freedom of Information request has uncovered the letter sent by the council’s former director of finance Matt Bowmer to former chief executive Paul Blantern warning that he intended to issue a section 114 notice.

Although a notice was not issued until this year, the letter reveals worries about a “corrosion of our financial management arrangements over the past 18 months”.

The letter said: “There has been a change of culture and behaviour where overspending is acceptable and there are no sanctions for failure”.

Bowmer criticised the adult social care department for failing to deliver £28m of £68m of savings outlined in the 2015-16 budget

“Most worrying is the seemingly defensive and non-compliant behaviour of the management team with what could be viewed as a ‘can’t be done’ attitude pervading,” Bowmer said.

“Indeed with the proposed reduction of £7.5m on learning disability services, which came forward in late November 2014, at times more energy was put into expressing unfairness rather than exploring strategies to meet the challenge.”

The letter also highlighted the council’s director of children, families and education at the time for a “strong reluctance … to make a contribution to the overall position.”

Bowmer wrote: “I fail to believe that there aren’t significant efficiencies to be made in this service, which we have always recognised as being inefficient as well as ineffective.”

The letter made a series of recommendations including a recruitment freeze and the termination of all agency staff contracts.

In March this year, a best value report by government inspector Max Caller said of Bowmer’s letter, which at that stage had not been published: “Of course, the section 114 report was not subsequently issued and there was no change to the approach; overspending without compensating action to recover the position continued.

“The then section 151 officer moved in mid 2016 to work exclusively as the finance director of LGSS; his warning was not taken seriously.”

Responding to the release of the letter, council leader Matt Golby said: “This letter clearly outlines the challenges the council was facing at that time.

“Those very same issues have since gone on to become contributing factors to the current financial crisis we are dealing with.

“With new senior management and political leadership in place it is now our determination to directly confront these issues and return the council to living within its means.”

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